Here's our summary of key events overnight that affect New Zealand, with news of drift, decline and unresolved issues that continue to fester.
First up, there are some indications China and the US are building the basis of agreement in their trade spat. China is said to be moving forward tariff reductions and the US is indicating these may be enough to halt further tariff increases. And there are Chinese reports that new orders for American soybean are coming. But markets seem to be treating all this with scepticism; they opened slightly high but on this news have drifted lower in mid-afternoon trade.
But maybe the drift lower is more to do with an acrimonious meeting President Trump had with Congressional Democrats, a meeting he called to get funding for his border wall. It descended into farce quickly with the President threatening to shut down the Federal Government unless he gets what he wants.
In the US, a "small business" confidence survey came in lower than expected. It is still positive however, but the shift lower was something few saw coming.
In China, banking sector debt growth rose more than expected in November after a sharp drop the previous month. Chinese banks extended 1.25 tln yuan (NZ$265 bln) in net new yuan loans in November, slightly more than analysts had expected and up from the previous month. Despite this, "total social financing", their measure of broad money, grew at its slowest pace in a very long time suggesting that their overall economy is cooling and probably faster than Beijing would like.
Chinese car sales fell in November, extending an unexpected decline. Reasons for this trend are hard to find, but excessive commitments to house buying, and the ubiquitous reach of ride sharing in the country are two ne popular theories.
In Germany, an important business survey of economic expectations came in negative again, but much less negative than many were expecting and less negative than in November. Given the state of sentiment in Europe these days, this is seen as an improvement.
And in Brussels, the EU has drafted a plan to prevent turmoil in the multi-trillion-dollar cross-border market for derivatives. The plan is necessary if there is a no-deal Brexit (which seems increasingly likely) to avoid sudden termination notices on these contracts.
In Australia, business confidence dropped further in November. An index of business conditions also fell continuing a downtrend in conditions that has been building all year.The business sector has lost some momentum with confidence levels now below average, suggesting that businesses themselves think momentum will slow further. The partisan policy paralysis in Canberra isn't helping.
The UST 10yr yield will start today at 2.85%. But their 2-10 curve has fallen to just under +11 bps, a -3 bps slip. The Aussie Govt 10yr is at 2.45% (and down -3 bps since this time yesterday), the China Govt 10yr is at 3.30% and down -1 bp, while the NZ Govt 10 yr is at 2.48%, and up +1 bp.
Gold is unchanged at US$1,244/oz.
US oil prices are marginally lower today to be just under US$51.50/bbl. The Brent benchmark is now just on US$61.50/bbl.
The Kiwi dollar is starting today little changed at 68.7 USc. On the cross rates we are holding the new higher level at 95.6 AUc, and firmer at 60.8 euro cents. That puts the TWI-5 up at 73.6.
Bitcoin is lower today at US$3,344 which is a -2.2% retreat since this time yesterday. This rate is charted in the exchange rate set below.
This chart is animated here.
The easiest place to stay up with event risk today is by following our Economic Calendar here ».
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